SBC News Voice of the Sports Betting Industry
Catena Media encountered several difficulties across the geographic breadth of its business during Q2 trading, with the firm’s North American revenue dipping as it embarked on major changes to its European operation.
The igaming media publisher reported group-wide revenue from continuing operations of €17m, a drop off of 16% on €20m recorded in Q2 2022. Adjusted EBITDA, meanwhile, fell 60% to €2.6m (€6.5% with a margin of 15% (32%).
Concentrating its growth in North American activities, Catena has hit hurdles in the market this year, with revenue from the region declining 16% to €12.5m from €15m.
North American trading accounted for 74% of Catena’s group-wide income during the quarter and maintained an EBITDA margin of 41%, which the firm asserted is in the face of “negative revenue impact of reduced marketing spend by operators”.
Strengthening its US network during H1, Catena entered into an agreement with Lee Enterprises Ltd, a major newspaper distributor in the country, which it believes will provide solid groundwork for growth in H2. 
Catena CEO Michael Daly said: “Q2 was a quarter of further evolution for Catena Media as we continued to transition towards a net cash positive business focused on regulated markets in North America.
“The group capitalised on the annual interlude in the North American sports calendar to undertake significant operational and financial streamlining measures ahead of the NFL resumption in early September.”
In Europe, a notable post-H1 development was Catena’s sale of its UK and Australian units, Squawka.com and GG.co.uk, to OneTwenty subsidiary Moneta Communications Ltd for €6m.
Following this divestment, the group set out plans to further reduce costs by €3.8m-€4.2m, by cutting down on expenses, a key priority for the firm going forward, as net debt as of 30 June stood at €10.6m.
This was accompanied by a share buyback programme, which saw 1,189,814 ordinary shares repurchased in July and a further 468,522 shares from 1-18 August. Difficulties have continued following the close of Q2, however, with July revenue down 3% year-on-year from 2022.
Offering further perspective into Catena’s H1 troubles, Daly explained that ‘stiffer competition’ in North America is the primary reason for the firm’s struggles there, with the entry of new betting and casino media and affiliate organisations into the market.
He did assert, however, that Catena has ‘bucked this trend’ in New Jersey due to the success of its partnership with the NJ.com new website. The CEO is hopeful that this partnership model has potential for further growth across North America.
Daly continued: “They diversify our market footprint by allowing us to reach farther and deeper into the online sports bettor and casino gamer audience and will form an important part of our toolbox going forward.
“The shared revenue component means these collaborations come with a lower operating margin than traditional affiliation, which makes it important that we pursue appropriate deals that offer favourable terms and conditions for both parties.”
A year-to-date breakdown saw little difference between H1 and Q2 trading, with total revenue for the full six months dropping 9% from €56m to €51m and adjusted EBITDA dropping 20% to €28m (H1 2022: €23m).
New depositing customers recorded for both Q2 and H1 periods also declined – the former by 31% to 49,770 (72,060) ad the latter 19% to 147,115 (180,686).
Explaining Q2 headwinds to investors, Daly outlined that ‘seasonal factors’ impact on sports revenue during this time of the year. Furthermore US results were further compounded by
2023 suffering from the lack of a major market launches such as Ontario in 2022 and the absence of a prominent sports tournament such as the 2021 Euros.
Despite these challenges, Daly remains confident in the prospects of a Catena EBITDA bounce back in H2, in which the media group maintains the longterm target of “$125m in North American revenue by 2025 and an adjusted EBITDA margin of over 50%.”
